Pending homes sales increased slightly in the US in September
Pending home sales rose slightly in the United States in September with growth led by substantial increases in both the West and Midwest, according to the latest index figures.
But year on year contract signing fell by 1%, meaning that the nation’s housing market has now seen pending home sales fall for nine months in a row, according to the data from the National Association of Realtors (NAR).
However, Lawrence Yun, NAR chief economist, believes that the market is stable and the figures indicate that buyers are out there on the side lines, waiting to jump in once more inventory becomes available and the price is right.
He explained that it is a lack of moderately priced homes for sale and affordability as factors that are restraining the housing market but when compared with the last few decades, the current affordability climate is still favourable.
‘When compared to the year 2000, when the housing market was considered very healthy and home sales figures were roughly equivalent, the affordability conditions were much lower compared to now. So even though affordability has been falling recently, the demand for housing should remain steady,’ he pointed out.
He also pointed out that while the economy is thriving, it has yet to have a substantial impact on the real estate market, but he believes that may be about to change. ‘The general condition of the economy is excellent, it simply has not lifted home sales this year. Home prices are still rising, so people who are purchasing are still seeing wealth gains,’ he added.
A breakdown of the figures shows that pending sales in the Northeast fell by 0.4% in September and they are now 2.7% below a year ago while in the Midwest they increased by 1.2% but are 1.1% down year on year.
Pending home sales in the South fell 1.4% in September but they are 3.3% higher than a year ago and in the West, while they increased by 4.5% they are well down on September 2017 with a fall of 7.4%.